Massachusetts Businesses: Going Solar Just Got Even Easier

Going solar comes with a wide range of benefits. Not only do you reduce your reliance on fossil fuels and help protect the environment, but you can also enjoy lower costs on your electric bill. Even better, there are many solar panel installation tax incentives available for businesses.

Solar panel installation can help a business drive down their fossil fuel usage and reduce their overall carbon footprint. For companies looking to go ‘net zero’ (cutting out all greenhouse gas emissions), solar panels can be a great starting point.

Solar panel systems in Massachusetts also come with tax incentives from the federal and state governments. Business owners can have their systems installed and apply for these credits, receiving tax breaks and even payments for excess energy.

BD Electrical & Solar can help you understand your credits, incentives, and benefits associated with going solar at your place of business.

Federal and State Solar Incentives

Both federal and state government programs provide incentives to Mass businesses who decide to install solar panels to help power their properties. Business owners can use these incentives to help cover the costs related to installation, as well as gain continued savings for collecting enough solar power to send some of it back to the local grid.

Below is a breakdown of various federal and state government programs that incentive Mass companies to go solar:

Net Metering

• Business owners in Massachusetts who go solar may end up collecting more solar power than they can use. In these instances, the power has to go somewhere, and that’s where Net Metering comes in. The state offers an electric bill credit for excess electricity that is sent back to the grid from any business owner’s solar panel system, providing a discount on electrical services from the local electric company.

MACRS

The Modified Accelerated Cost-Recovery System allows business owners to choose how they receive their tax deduction for the depreciating value of their solar panel system over time. Businesses can choose to take a 100% depreciation bonus in the first year or spread the depreciation tax credit over the course of 5 years, whichever works best for them

Within the accelerated method, businesses can choose to take a 100% depreciation bonus in the first year or spread the depreciation tax credit over a set number of years. The decision of whether to take the 100% depreciation bonus or spread the tax credit over multiple years depends on the specific financial situation of the business.

If a business has a high tax liability in the first year or is looking to improve cash flow in the short term, taking the 100% depreciation bonus in the first year could be beneficial. On the other hand, if a business has a lower tax liability in the first year and expects to have higher tax liabilities in the following years, it might make more sense to spread the depreciation tax credit over time.

Ultimately, the choice between the two depreciation methods depends on the financial goals and circumstances of the business. It is recommended that businesses consult with a tax professional or financial advisor to determine the best depreciation method for their specific situation.

SMART Program for Businesses

• The Solar Massachusetts Renewable Target Program for Businesses offers monthly incentive payments to residents for 10 years or commercial businesses for 20 years. The state of Massachusetts will pay solar customers of National Grid, Eversource, or Unitil based on their capacity block. This provides an extra bit of income for any business owner who goes solar.

ITC

• The Investment Tax Credit is a credit made available to both residential and commercial property owners. This program provides credit for new solar panel installations, based on the year when the installation occurred. In 2023, the credit stands at 22% of the total cost of installation, and the program incentivizes early adoption by declining each year. For business owners, this credit will decline to 10% in 2024 and onward.

Where to Begin with Solar Installation

Starting a solar panel installation project can seem daunting. Who do you talk to first? Where do you get supplies? Who handles the installation? You may have a lot of questions at first. Here are a few tips on where to begin:

Choose the right equipment: There are many different types and sizes of solar panels. Some are designed for roof installation while others are made for ground-level installation. Decide which type is best for you and what you can afford. Talking to suppliers about your roof or property space, as well as future plans to add more panels, can be a good first step in going solar.

Talk to a qualified solar panel installer: Not all solar panel installers are the same. It’s best to find a well-qualified, well-seasoned crew for the job. BD Electrical has spent the past 15+ years installing top-grade solar panels throughout Southeastern MA. We can discuss your needs, inspect your property, install the panels, and make sure your system is properly connected.

Connect your system to the local grid: Every solar panel system must be connected to the local electrical grid. That way, you can receive federal and state-level credits for having your system in place. It also allows you to deliver excess power to the grid and receive a net metering credit on your electricity bill.

These steps can be handled quickly and easily with the help of the right people. In just a few steps, you can be on your way to enjoying green energy and savings at your place of business.

Rely on BD Electrical for Solar Installation

BD Electrical can help business owners throughout Southeast MA maximize the benefits of switching to solar. We understand where to place solar panels for maximum efficiency. We also understand the details of the federal and state incentive programs to help you maximize your savings post installation. Our crew will work closely with you to discuss your needs, perform the installation, and get your system running smoothly.

It’s important to remember that the tax breaks associated with installing solar panels apply only to projects that are started before the end of September. The tax break for this year is 22% but will only be 10% starting in 2024. If you start your solar panel installation project after September, you will only get a lesser tax break for installation.

Schedule your free consultation today to get your solar initiative off the ground to qualify for 2023 tax breaks and incentives.